In Munoz-Gonzalez v. D.L.C. Limousine Service, the Second Circuit Appeals Court recently held that a chauffeured transportation company fits the FLSA’s overtime “taxicab exemption” despite the company’s recurrent service contracts and its lack of several conventional taxicab features like a taxi meter or roof-mounted signage. The Court’s interpretation of the term “taxicab” prioritizes the public’s ability to engage the service at-will over many characteristics traditionally associated with taxis. 

D.L.C. Limousine Service, Inc. (“DLC”) operates in New York’s Westchester County.  Most of DLC’s fares originate at the county airport taxi stand.  DLC also receives fares from a central dispatch available to the public. A small fraction of its fares come from contracts with a local hotel and a corporate contract. DLC cars do not accept street hails or use a meter. DLC uses luxury cars and requires drivers to dress in a suit and tie.

The Court defined a “taxicab” as:

            1) chauffeured passenger vehicles 

            2) available for hire by the public, and  

            3) without a fixed schedule or route.

The Court held that DLC’s cars are taxicabs whose drivers are thus exempt from overtime payments under the FLSA. The court arrived at this holding because DLC’s cars are primarily engaged at-will by the public through dispatch or at the airport stand. The Court stated that DLC cars do not “lose their essence” as taxicabs simply because it does not use taximeters or accept street hails. Indeed, most towns in Westchester County prohibit traditional taxis from performing street hailing service.

The case has significant implications for limousine operators in the Second Circuit (New York, Connecticut, and Vermont). Provided that a limousine operator has similar characteristics as DLC, it may benefit from the taxicab exemption under the Fair Labor Standards Act. Also, the court’s reasoning suggests that TNCs, such as Uber or Lyft, may benefit from this new opinion as well. We note that this opinion is not consistent with the Department of Labor’s traditional position on the taxicab exemption or potentially with other federal circuits around the country. So operators should consult with their counsel to determine the applicability of the taxicab exemption in their jurisdiction and with respect to their own operations.